Notable News of the Week: March 30, 2012

At the end of the work week, Ratehub will summarize the news that had the mortgage and housing industry talking. This past week, headlines emerged from Ottawa as Jim Flaherty urged lenders to get tougher with their lending practices, which we are already starting to see in the condo market among developers. Ottawa also took home the trophy for the 2012 Best Canadian Place to Live.

Move over Jersey Shore and Big Brother, a condo developer in Vancouver has launched a daring marketing campaign in the same vain. Three people will live inside a fully furnished glass condo placed inside a Surrey mall AND their every action will be broadcast live over the internet for the next six weeks. Clearly, the developer is targeting young professionals.

Canada’s Finance Minister, Jim Flaherty sent a message to banks that they need to be more restrictive with their lending habits. Mr. Flaherty feels that financial institutions are waiting for Ottawa to make changes to mortgage regulations, rather than tighten their lending themselves. According to CAAMP, Flaherty is concerned about three things: high household debt, fear of rising interest rates, and a housing downturn.

Canadian banks are making it more difficult for condo builders to get funding for their projects by demanding higher pre-sales and deposits. The Office of the Superintendent of Financial Institutions has warned banks to be more selective with their lending while condo markets such as Toronto and Vancouver remain at risk of overheating.

The Canada Mortgage and Housing Corporation announced that it will curb its mortgage growth over the next few years in an effort to help cool off Canada’s overheated real estate market. Currently, the Canadian housing market represents $1.1 trillion dollars. Ottawa is looking to shift the onus of bad mortgages away from the taxpayer and towards the banks that issue them.

A performance artist in Seattle has turned her garage into a 250 square foot loft where she resides while she rents out the main house. She originally paid $208,000 for both the house and garage. The entire renovation cost $32,000.

A survey conducted by BMO revealed that 43% of Canadians would be left on unsure footing with their mortgage affordability if mortgage rates increased. However, provincial results varied, especially in Alberta where three out of four say a rate increase would not affect them at all.

One in five Canadian households would struggle if mortgage rates increased 2.0% – The Ottawa Citizen

The BMO survey mentioned above also stress tested Canadians if mortgage rates were to increase by 2.0%. One in five said they wouldn’t be able to handle the increase. These results are important because a 2.0% rate hike isn’t that unreasonable to fathom. Mortgage rates are at historic lows, but can’t remain at that level forever.

Moneysense released their latest results from their report: Canada’s Best Places to Live 2012. For the 3rd year in a row, Canada’s capital takes the top spot. The report ranked 190 Canadian cities across 22 categories such as air quality, housing, crime and doctors per 1000 residents. It’s interesting to note that a B.C. city did not make the top ten; instead, we find three cities from the prairies (Winnipeg, Brandon and Regina).

Are stubborn sellers killing the real estate crash? – Financial Post It seems to be the new trend for first-time buyers: saving more while waiting for home prices to drop. And while Flaherty’s new rule that decreased … Read More

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